Asked by: Ramy Voinescu
Asked in category: business and finance, job market
Last Updated: 23rd Jul 2024

What is the name of the curve that depicts consumer utility?

Indifference Curve

Another question is: What is the indifference curve using examples?

Two commodities can be substituted for each other. In this instance, the indifference curve, which is a straight-line, is consistent with MRS. Two goods can be considered complementary goods. An example would be gasoline and water inside a car. In these cases, the IC is L-shaped and convex to its origin.

Is a utility function equivalent to an indifference curve? The utility function is a function of the commodities consumed. It defines the level or satisfaction of utility. A curve of indifference shows the total number of goods that provide the same level satisfaction.

It is also important to understand the meaning of Isoquant.

Meaning. Meaning. An Isoquant curve shows all combinations of inputs that produce the same output level. 'Iso is equal, and 'quant is quantity. An isoquant therefore represents a constant output quantity.

Why do the IC curves never cross each other?

Indifference curves can't intersect one another. This is because the higher curve gives as much as the two commodities at the point where tangency is reached than the lower Indifference curve. The consumer will also be satisfied with the combination of points B and E on the indifference curve, IC1.